MWPVL · productivity of this function Understanding how to improve the packing function basically...

Leadership in Supply Chain and Logistics Consulting

MWPVL

International®

Supply Chain | Experience

Marc Wulfraat

President

(514) 482-3572 x 100

[email protected]

All Rights Reserved to MWPVL International Inc. January, 2013

Options to Improve Productivity at a Parts Distribution Center

mailto:[email protected]

All Rights Reserved. MWPVL International Inc., 2012 www.mwpvl.com

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MWPVL

International®


Supply Chain and Logistics Consulting Firm

Headquartered in Montreal Since 2006; 2nd Office in Caribbean

26 Years Consulting Experience, 200+ Mandates Completed

Markets Served: 75% USA; 15% Canada; 10% Rest of World

Markets Served: Retail 40%; Distribution 35%; Manufacturing 25%

Specialization : Strategy, Operations, DC Design, Technology

Company Overview


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MWPVL

International®


Execution

Suppliers

Planning

Raw Materials Processing

Production Distribution,

Wholesale, Retail Transportation Store Consumer

Distribution Network Optimization 2

1 Global and Domestic Supply Chain Strategy

5 Distribution Channel Strategy

Supply Chain Demand Planning and Forecasting 6

3 Distribution Flow Path Optimization

7 Transportation Management & Optimization

4 Product Sourcing and Procurement Strategy

Operations Assessments 9

8 Supply Chain Execution Technology

Purchasing, Forecasting and Inventory Management

Outsourcing to 3PL Service Providers

Distribution center Design

Logistics Excellence

Material Handling Systems

10

11

12

13

14

MWPVL International Services Overview


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MWPVL

International®


Why Hire MWPVL International?

MWPVL International provides clients with:

Unbiased experience in supply chain and logistics operations

Strong experience in helping distribution companies in the following critical areas:

Invaluable insight to improve efficiency, accuracy, service level and quality of your distribution operations

Optimized supply chain network strategies to support the business strategy and growth objectives of your company

The design and implementation of distribution facilities to maximize asset utilization, labor efficiency and quality of service

The selection and deployment of supply chain and logistics technology applications

A trusted advisor in supply chain, logistics and distribution best practices.



Goal : To improve labor productivity within the same four walls of your distribution center by deploying cost justifiable solutions

suitable to the specifics of the warehouse operation


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MWPVL

International®


Unique Characteristics of a Parts Distribution Operation

Parts distribution centers are typically characterized by:

Parts distribution centers often have more than 100,000 SKUs in stock

5% – 10% of the inventoried parts constitute 80+% of the order line activity

The need to pick at all vertical levels of the distribution center because of insufficient real estate at ground-level to provide pick facings due to the high variety of parts being stocked

Low pick density and high travel time per order

A ratio of putaway lines to pick lines that is in the range of 1 : 2 thus stocking labor is very labor intensive

Wide variation in shape, size and weight of parts which requires multiple storage zones and picking strategies to optimize the operation

Parts distributors must often ship orders within a very tight time window (e.g. 30 minutes), particularly in the automotive aftermarket industry where service centers are ordering parts


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MWPVL

International®


Measuring Labor Productivity

In the absence of defined labor standards, the measurement of current labor productivity rates is a critical first step to better understand opportunities for productivity improvements within the operation

Measure each discrete job function by capturing the worked man-hours and the throughput volumes (e.g. order lines, units, cases, cube)

Develop a simple table as shown in the next slide

Isolate the job functions that are relatively inefficient

Typically, in parts distribution centers, productivity gains can be achieved through techniques designed to increase pick density and reduce travel time


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MWPVL

International®


E.g. Measure Productivity by Function

Identify current productivity levels by job function and whenever possible benchmark against other similar parts distribution operations – see example below

Operations Component

Engineered

Labor Standard

(Lines/Hr)

Historical

Labor Standard

(Lines/Hr)

Benchmark Rates

Comparable Operations

(Lines/Hr)

Reach Truck Receiving + Putaway 10 8 - 9 10 - 15

Putaway 31 25 25 - 35

Picking - Bins 75 70 60 - 100

Picking - Lower Racks 53 45-50 50 - 75

Picking - Man-up Order Selector 23 20 20 - 35

Picking - Reach Truck 17 10 - 15 10 - 15

Packing 88 80 75 - 100

Shipment Processing 250 ctns/5.0 Hours 250 ctns/Shift 200 - 300

Kitting 114 105 N/A


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MWPVL

International®


Discrete Pick Locations

Many parts distribution centers lack the notion of a discrete pick location per part

A discrete pick location by definition is a unique bin location address that is assigned to one part only such that the location is not shared with any other part (i.e. each pick location can only be assigned to one item only)

When a shelf level contains multiple SKUs co-mingled to a single shelf level, the operator must search through the parts to find the right one to be picked

The time penalty per pick transaction is approximately 5.75 seconds in bin shelving and 3.45 seconds in racking slots

This is due to the extra time required to search for the matching part number

Another way of saying this is that a pick rate of 67 lines per hour can increase to 75 lines per hour if each SKU has a discrete pick location

Establishing a discrete pick slot with a properly-sized pill box / bin container will have the dual benefit of speeding up the picking process and increasing picking accuracy


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MWPVL

International®


E.g. Vertical Parts Picking With Pill Boxes for Discrete Locations


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MWPVL

International®


Defining Picking Strategy Around Part Velocity

Typically the top 5% parts generate 50% of order lines (A items) Hot zones Pick to Light Reverse pick concept

Next 5% of parts generate 25% of the order lines (B items) Slotting strategies Right size/location of pick slots

All other parts are very slow moving Dead zones Mezzanines and takeaway

conveyors Vertical picking with man-up trucks Stockchaser trucks Cluster picking Less attention needed for these

SKUs


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MWPVL

International®


High Velocity “A” Parts - Picking Strategy : Hot Zones

For “A” items, set up a high density picking zone with the goal to increase pick density and reduce travel time for both picking and putaway operations

An ergonomically designed “hot pick” area combined with pick to light or similar technology can enable rapid order turnaround time combined with high levels of efficiency


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MWPVL

International®


High Velocity “A” Parts - Picking Strategy : Pick to Light

Pick to Light Typically applied for less than

case pick in flow racks (or shelf bins) where faster velocity parts are being picked

Highest levels for picking accuracy – typically in the 99.95% range

Pick productivity typically in the 100 – 250 lines/hour range depending on order density

Often combined with a conveyor for picking multiple orders concurrently

Cost of pick to light system is a function of the number of pick locations that require lights so it makes most sense to use this technology for say the fastest 2 – 3,000 parts


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MWPVL

International®


Medium Velocity “B” Parts Picking Strategy : Horizontal Carousels

Carousels Suitable for small cube parts

that are medium to high velocity in terms of “hits”

Efficient space usage due to elimination of operating aisles

Downside is that they need to be shutdown during a quiet time to be replenished

Pick rates can range from 150 – 600 lines per hour (average is 250 - 300) and are a function of:

₋ 2 vs. 3 vs. 4 carousel pods per picker

₋ Batch pick 12 orders at a time with put to light

₋ Riser platform

₋ Scanning confirmation requirements


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MWPVL

International®


Slow & Medium Velocity “B” & “C” Parts Picking Strategy : Mezzanines & Zone Transfer Conveyors Slow Velocity Parts

Conveyors 2nd Level mezzanine and

ground level shelf picking

Shelves run perpendicular to takeaway conveyor

Small parts are picked into cartons or totes for transfer to another pick zone or to packing

Zone picking – more than 1 operator works the order

Cluster picking – picker works multiple orders at a time

Audit process for 0.5% of orders

Mechanized takeaway conveyors to sortation to pallets


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MWPVL

International®


Slow Velocity “C” Parts Picking Strategy : Cluster Picking Strategies for Slow Velocity Parts

Pick and sort multiple small orders to a cart E.g. 16 – 32 orders are

picked and sorted concurrently

Can be deployed in slow moving areas of the warehouse where bin shelving is used (e.g. mezzanines)

Typical 75 – 110 lines per hour pick rate depending on many factors

Lightweight design Totes can be removed

and deposited to takeaway conveyor


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MWPVL

International®


Slow Velocity “C” Parts Picking Strategy : Stockchaser Trucks

A stockchaser truck (e.g. Taylor Dunn) is a vehicle that allows a picker or stocker to quickly travel the warehouse

Operator can access product at ground level

Stockchasers can pull a cluster-pick carts (see previous slide)

http://4.bp.blogspot.com/-GCZSXltYIOM/Ta-1MqKsRGI/AAAAAAAAADk/TW90sFYie1Q/s1600/taylordun.JPG


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MWPVL

International®


Slow Velocity “C” Parts Picking Strategy : Vertical Picking – Man-Up Order Picker Trucks

VNA aisles can be configured to be as narrow as wide 48” with wire guidance or say 72” without wire guidance

Product is hand stacked into vertical rack locations with wire mesh / plywood decking

Strategy for larger SKUs that do not fit into shelf bins

Slot fastest “C” items at ground level to reduce vertical travel

Pick rates vary but will often be in the range of 25 – 50 lines per hour


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MWPVL

International®


Optimizing the Packing Function

Packing Table Layout and Design is critical to maximizing the productivity of this function Understanding how to

improve the packing function basically requires insight from having been exposed to other distributors that do well at this function.

Pack rates typically range from 75 – 100 lines per hour for parts distributors.


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MWPVL

International®


Option: Voice Directed Picking (VDP)

Voice Directed Picking Flexible because the technology

can be used in all areas of the warehouse.

Most applicable to areas where two hands are needed for the job

₋ Heavy Full Case (e.g. oils, fluids)

₋ Bulk products

₋ Tires / Exhaust pipes, etc.

Cost of the technology is a function of the number of pickers using voice.

Accuracy levels are higher than RF picking because of less quantity errors and eyes always on the job.


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MWPVL

International®


Option : Slotting Systems

Slotting Software to continually

optimize pick slot assignments to parts

Tends be require a ½ full time inventory person to make this work.

Reslot every quarter or every major season

Only useful if it is used – start-up time can be 4 – 6 months

Keep fastest “hit” items at the end of the shelf runs to minimize travel into pick aisles

$75 – 100K typical investment


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MWPVL

International®


Option : Warehouse Heat Map

Warehouse Heat Map

Used to analyze where labor has been most active in the warehouse

Can be used to visually analyze where the most “hits” have been taking place so that reslots can be made for the worst offenders


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MWPVL

International®


Recap and Conclusions

Parts distribution centers generally suffer from low productivity rates because they have large SKU populations and most of the parts are ordered at most a few times a year

This presentation highlights the importance of developing picking and storage strategies by the notion of velocity class

Techniques in this presentation are designed to increase pick density and reduce travel time

There are different technologies and material handling equipment solutions that are most suited to each of the strategies identified in this presentation

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